How A Mining Magnate Bounced Back After The Bolivian Government Nationalized His Company

Prophecy Platinum Corp. (NKL), has scored a major talent coup by attracting a trio of credible and experienced mining executives to advance its flagship Wellgreen platinum, nickel and copper project in the Yukon Territory.

We had the opportunity to sit down with new CEO Greg Johnson yesterday to better understand Prophecy Platinum's evolving story (Jump to video).

Johnson is a geologist who played a key role in the discovery and advancement of the 40-million-ounce Donlin gold deposit in Alaska. He was also co-founder at NovaGold Resources, and was most recently CEO of South American Silver.

At South American, Greg and his team grew the company from approximately $20 million to more than $300 million in market capitalization at its highs, expanding their resource from about 100 million ounces to over 400 million ounces of silver.

However, the South American story was just too good for the Bolivian government, which nationalized the company's flagship Malku Khota project in July, 2012.

The "huge disappointment" brought Johnson back to Northern Canada, a safer political jurisdiction for mining, and Prophecy Platinum Corp., where he was announced as CEO on November 5, 2012.

Johnson's enthusiasm for Prophecy was expressed when he told us, "We have the full story: world class project, team with the experience and expertise to advance this towards production, and intrinsic value in terms of the upside potential."

The Wellgreen project, we learned, is open for further growth laterally and at depth despite already hosting over 7 million ounces of precious metals.

Two other appointments at Prophecy bolster Johnson's enthusiasm for Wellgreen's potential.

New COO John Sagman, "has been a mine builder and has worked for major mining companies, particularly in the platinum and nickel side of the business. He's worked in the Yukon for development-stage companies, so he's a very hands on, nuts and bolts guy who understands how to design, build and operate a mining operation like we may be looking at at Wellgreen."

Prophecy has also attracted a successful CFO in Jeff Mason, whose experience should reassure investors that the company will be successful at raising the capital required to move Wellgreen forward.

"With some of the most successful companies from the Hunter Dickinson Group, [Jeff] was Chief Financial Officer," said Johnson. "He's been involved in a lot of financings and understands the business well."

According to Johnson, the Prophecy plan is to continue to de-risk the project through various engineering studies, as well as to expand the resource through drilling. Navigating these phases has the potential to unlock value for shareholders.

Johnson quoted examples such as Novagold, Detour Lake and South American Silver where 5x to 10x growth in share price occurred as a project moved from the initial engineering and resource stage to feasibility over a period of 3-5 years.

It's worth noting that during Johnson's tenure at NovaGold, there was a 22-cent to 22-dollar move in its share price. There is no way of predicting whether growth like that can be repeated at Prophecy, but the fact that it happened is encouraging.

Further, 93% of the world's platinum group metals supply comes from South Africa, Zimbabwe and Russia, so there is market demand for a more stable supply source like Canada.

There is much more to learn about resource development, Prophecy Platinum and its' new CEO in the full 18 minute interview. It is a must watch for anyone involved in the junior resource sector, and we thank Greg for joining the program.